Workplace accidents are an unfortunate reality across industries, with tens of thousands of employees in Singapore sustaining work-related injuries each year. When these incidents occur, both employers and workers face significant financial burdens – from mounting medical bills to lost wages during recovery periods. This is where work insurance becomes essential.
Work Injury Compensation Act (WICA) Insurance is Singapore’s mandatory safety net that protects all employees from the financial impact of work-related injuries, illnesses, and occupational diseases. Unlike traditional insurance policies, WICA operates on a no-fault basis, meaning employees can receive compensation without proving employer negligence, ensuring swift financial relief when they need it most.
For employers, WICA insurance provides crucial protection against potentially devastating liability claims, while for employees, it guarantees access to medical coverage, wage replacement, and compensation for permanent disabilities.
Understanding how this mandatory insurance works is vital for creating a secure workplace environment that protects everyone’s interests and ensures compliance with Singapore’s employment regulations. In this blog, we share key details about this insurance and how you can stay compliant.
Key Takeaways
- WICA insurance is a legal requirement in Singapore, ensuring financial coverage for work-related injuries, illnesses, and occupational diseases.
- WICA covers medical expenses, medical leave wages, and lump-sum compensation for permanent incapacity or death.
- Employees can claim compensation without proving employer negligence, simplifying the process and ensuring timely support.
- Employers should assess employee roles, risk levels, and industry-specific needs to choose the right WICA Insurance policy.
What is WICA Insurance Coverage?
WICA insurance refers to the Work Injury Compensation Act (WICA) insurance in Singapore. It is a mandatory insurance policy that provides coverage for employees who suffer from work-related injuries, illnesses, or occupational diseases.
Related Read: What is Company Insurance in Singapore and Should You Get it?
Is WICA Compulsory in Singapore?
Business owners in Singapore must obtain WICA for:
- Employees doing manual work, regardless of salary
- Employees doing non-manual work earning up to S$2,600 a month. This excludes:
- Overtime payment
- Bonus payment
- Annual wage supplement
- Productivity incentive payment
- Allowances
You must have WICA coverage for local and foreign employees. For employees that do not fall into these categories, you can choose whether to buy insurance for them. However, if an employee makes a valid claim, you must compensate them regardless of whether they are insured.
What is the Difference Between WICA and Foreign Worker Medical Insurance?
The Work Injury Compensation Act (WICA) and Foreign Worker Medical Insurance (FWMI) serve distinct purposes in Singapore:
| WICA | FWMI |
|---|---|
| Covers work-related injuries, illnesses, and occupational diseases for all employees (local and foreign). | Specifically for foreign workers on Work Permits and S Passes. |
| Provides compensation for medical expenses, medical leave wages, and lump-sum payments for permanent incapacity or death. | Covers non-work-related medical expenses, including inpatient hospital bills and day surgeries. |
| Employees can claim without proving fault, making it a simpler alternative to common law claims. | Employers must maintain a minimum annual coverage of $60,000 per worker (as of July 2023). |
In summary, WICA focuses on work-related incidents, while FWMI addresses non-work-related medical needs for foreign workers
How to Buy WICA Insurance
Since 1 January 2021, it has been mandatory that all WIC policies are issued by a designated insurer and must adhere to MOM’s compulsory terms. Employers are advised to finalise all insurance contracts and provide the details needed to their insurer at least 21 days before the policy begins.
Below is a checklist for employers buying or reviewing their company’s WICA per the stated timeframes:
| Insurance Policies Starting Before 1 January 2021 | Insurance Policies Starting After 1 January 2021 |
|---|---|
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How to Choose the Right WICA Insurance Policy
Selecting appropriate coverage requires careful evaluation of several factors:
Coverage Assessment
- Employee Count: Accurate headcount for all covered workers
- Job Classifications: Proper categorisation of manual versus non-manual roles
- Risk Levels: Industry-specific hazard evaluations
- Salary Ranges: Current wage structures for premium calculations
Provider Selection
Choose from MOM-approved insurers offering:
- Competitive premium rates
- Comprehensive claim support services
- Strong financial stability ratings
- Responsive customer service capabilities
Policy Features
Evaluate policies based on:
- Coverage limits meeting your exposure needs
- Claim processing efficiency
- Additional benefits beyond minimum requirements
- Premium payment flexibility
Industry-Specific Considerations
Different business sectors face varying risk profiles requiring tailored approaches:
High-Risk Industries
Construction, manufacturing, and logistics companies should prioritise:
- Maximum coverage limits
- Comprehensive medical expense coverage
- Robust claim support services
- Safety consultation resources
Office-Based Businesses
Professional services and administrative companies can focus on:
- Standard coverage meeting minimum requirements
- Cost-effective premium structures
- Streamlined policy management
- Digital claim submission capabilities
Non-Compliance Penalties
If you do not provide sufficient insurance for your employees, you are liable to a fine of up to S$10,000, jail of up to 12 months, or both.
Manage Your WICA Insurance for Peace of Mind
Aside from regulatory compliance, having WICA insurance is a strategic investment in your business’s financial security and employee welfare. By understanding your obligations, selecting appropriate coverage, and maintaining proper protocols, you create a foundation for sustainable business operations while protecting your workforce.
Remember that the cost of proper business insurance pales compared to the potential financial devastation of uninsured workplace accidents. Partner with approved insurers, maintain accurate records, and prioritise workplace safety to maximise the protective benefits this essential coverage provides.
Take action today by reviewing your current coverage, assessing your compliance status, and consulting with qualified insurance professionals to ensure your WICA insurance strategy aligns with your business needs and regulatory obligations. Find out how we can help with the spectrum of services we provide!
FAQs about Work Injury Compensation Act (WICA) Insurance
Why is WIC insurance compulsory only for some employees?
- Compulsory insurance provides greater compensation assurance to more vulnerable workers.
What can be claimed under WICA?
- WICA insurance in Singapore provides claimage for work-related medical expenses, medical leave wages, and lump-sum compensation for permanent incapacity or death.
Am I still responsible for my injured foreign employee's well-being if their work permit has expired or been terminated?
- Yes, you stay responsible for your foreign employee’s upkeep and well-being until they return to their home country. Your injured employee should continue to stay in accommodation provided by you.
Learn more about the mandatory guidelines for employment of your company staff today!
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